'Private' cable TV delivers at a saving

THE BALTIMORE SUN

When you pay anywhere from $165,000 to $1 million for a ne condominium at one of Baltimore's most prestigious high-rise addresses, you expect more than rabbit-ears on your television.

But the television system the first buyers at Harbor Court, a high-rise west of the Inner Harbor, discovered when they moved seven years ago was only a little better than that.

Wired to conventional antennas on the roof, it offered only broadcast stations from Baltimore and Washington, plus a single premium movie channel furnished free by the Harbor Court Hotel next door.

"This isn't atypical," said owners' association President Robert F. Schoenhofer.

"A developer trying to get rich will only do a good job while sales are in progress. They do everything people can see, and really skimp on the rest."

And buyers don't often lug their sets along to check out the TV before they sign on the dotted line.

So, confronted by TV fare more meager than that they left behind in the cabled suburbs, Harbor Court owners looked for an alternative. And, like a growing number of condominium and apartment building owners, they soon discovered "private" cable television.

Private cable systems are nothing more than heavy-duty satellite dish systems wired in to every residence in the 175-unit complex.

The systems are usually sold or furnished by private vendors, who then custom-design and deliver whatever programming the owners request -- at rates well below those of the local franchise cable company.

After rejecting a proposal from United Artists Cable, Baltimore City's cable franchise holder, Harbor Court residents bought a four-dish cable TV system for a little more than $100,000.

For less than $23 a month per condo, it delivers 11 Baltimore and Washington broadcast channels; 13 "basic" cable channels such CNN, ESPN, CNBC and Arts & Entertainment; three movie channels; Home Team Sports; four radio stations; a video bulletin board; and all maintenance.

A similar package with United Artists would cost at least $50 a month.

The building-wide savings paid for the hardware in 2 1/2 years. Monthly rate increases have totaled just 18 cents in the past three years, according to Walt Frazier, president of Stansbury Satellite Systems in Baltimore, which built the system and services it.

Interest has 'skyrocketed'

As franchise cable TV systems have raised their rates and extra charges in recent years, more and more multi-family property owners have inquired about private cable systems as a cheaper and more flexible alternative.

"Certainly the interest in private cable has just skyrocketed," said Carolyn S. Cross, a programming consultant for Heifner Communications Inc., a satellite TV brokerage in Columbia, Mo.

Heifner is one of three brokers that sell programming to local satellite TV vendors, who in turn sell it to properties like Harbor Court.

"I doubt if there is anywhere in the U.S. now that a property owner would not say to a [franchise] cable company, 'Give me your bid, and I'm going to go to a private cable company' " for a competitive proposal, Ms. Cross said.

And many are buying. Condominiums at Henderson's Wharf, the Anchorage, Canton Cove and Scarlett Place have gone with private cable systems. So have the Glen Meadows and Charlestown retirement communities in Baltimore County.

They deal with vendors who sell the hardware and, for a monthly TTC fee, arrange for the satellite signals that activate the customer's decoder box and deliver the programming -- much like a telephone number rings a single phone.

"I sell the programs just like the cable company sells it," said Stansbury's Walt Frazier. "But I don't make the profit that cable makes from it." As a result, customers save money on their monthly rates -- often enough to pay for their hardware within three to four years.

Comcast, which has 250,000 subscribers in Baltimore, Harford and Howard counties, is not panicked by the relative handful of customers lost to private cable.

"We don't at this point consider it a significant competitive factor," said Comcast spokesman David Nevins. "Needless to say, we'd like all the business we can get, and we are aggressively pursuing it. [But] our position is that we have far more of that business than we don't have."

"If we lose it, we lose it on price," he said. But he argues that most private cable companies cannot provide the 24-hour repair service, the number of channels or the community-access channels the franchises offer.

Private cable TV systems may one day compete with franchise cable systems in neighborhoods of town houses or single-family homes. Mr. Frazier said growing numbers of residential developers are inquiring about designs for private cable TV. Some neighborhood associations, particularly in areas where the original developers signed exclusive contracts with the local franchise cable company, are asking about switching to private systems as those contracts expire.

But for now, multi-unit residential properties such as apartment buildings, condos and retirement communities have been the industry's best market.

The Town and Country Management Corp. in Baltimore has installed private cable systems in 18 of its Maryland rental apartment communities and seven more in Pennsylvania. All are managed and serviced by Town and Country employees trading as Superior Cable Television.

"We're serving over 10,500 of our residents," said Michael H. Rosen, the company's executive vice president and chief operating officer. Just over half of Town and Country's residents subscribe.

"Our standard system is 36 to 40 channels," Mr. Rosen said. They all offer broadcast channels, the basic cable channels, and a selection of four premium movie channels. Residents at each complex are surveyed annually about the programming, and their channel selections are customized accordingly.

"Depending on where I am, my rates are from 70 to 80 percent less than the franchise people," he said.

In Baltimore County, Town and Country's basic rate is $20 a month, including Home Team Sports. That would cost a Comcast customer about $40. Residents can add the first premium movie channel for $11 a month, compared with $15 at Comcast.

'Residents love it'

"Unlike the franchise people, this is not my prime business," Mr. Rosen said. "It's much more important to me to keep my residents happy. . . . The residents love it."

Town and Country's far-flung cable systems are serviced by just three full-time technicians.

The company employs two full-time customer service people. An office manager helps with phone calls, the billing and bookkeeping are handled by Town and Country's main office.

Mr. Rosen said his cable operations make a small profit. But "you've got to remember . . . our business is renting apartments," he said.

The 1,800-unit Charlestown retirement community in Catonsville evicted Comcast last year and built its own private cable TV system. It was mostly an economic decision, said Dan Rexford, Charlestown's acting executive director.

"My feeling was we were looking at 10 percent per year [in rate increases] for several years in a row," he said. He also wanted more program flexibility -- he wanted to dump rock 'n' roll channels such as MTV and VH1, and add channels better suited to an older clientele.

Using in-house expertise and existing wiring, Charlestown spent to build a private cable system that now delivers 41 channels. The basic service includes the standard broadcast and cable fare, plus a popular in-house Channel 6 that delivers daily news, information and features produced by its own staff.

All of this costs residents just $4.30 a month, included in their monthly rents. A premium movie channel or HTS adds $10, or two for $17. But most residents don't bother.

When no one at all asked for the Showtime or Disney channels, Mr. Rexford said, their slots on the dial were filled by two religious channels -- one Catholic, one Protestant.

A skeptic no longer

"It's been remarkable," said Mr. Rexford. "I was one of the ones who was kind of skeptical. This sounded like a technical challenge."

But it has required barely two hours a week of maintenance, including occasionally re-aiming or knocking snow off the three dishes, and checking power boosters that keep the signal strong throughout the 110-acre complex.

Residents seem delighted with Channel 6, and as happy with the rest of the system's program fare as people of a pre-TV generation are likely to be.

"The news is excellent. The rest is pathetic," said William F. Boglitsch, 84, and a Charlestown resident for three years. "But I'm getting old and cantankerous, and I'm hard to please."

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